The Australian property market has demonstrated great resilience against the headwinds of 2020, largely avoiding the doomsday scenario of 10pc price falls that many economists predicted.
After Melbourne’s second lockdown disrupted the traditional spring selling period, a ferocity of demand has followed.
Property purchasers have responded strongly to the many government and market incentives being offered, which, when coupled with the low interest rate environment, represent an opportunity to save buyers significant amounts of money.
This is particularly true for first home buyers in the off-the-plan sector who are leading the resurgence – where HomeBuilder incentives and stamp duty concessions are fuelling confidence to enter the sub-$1m market.
House and land packages have been the immediate beneficiaries and are back to their previous highs. However, if we look to historical trends, bolstered activity in the off-the-plan sector quickly follows the trajectory of the house and land sector.
Enquiry and purchasing levels are anticipated to remain high into the new year, with an earnest return of the interstate investor in Victoria.
Prior to the pandemic, all economic signs around Victoria showed the state was the strongest in Australia, with significant population growth, infrastructure investment, employment opportunities and lifestyle advantages.
While Victoria was most impacted by COVID, it’s recovery into 2021 is looking strong and fast, which should see it return to its status as the nation’s preferred state for investment – particularly by Sydneysiders who have always regarded Melbourne to offer comparatively great value in the residential market.
Diplomatic tensions with China will continue to hinder interest from what was previously our strongest international market, and until international travel is reinstated, we can expect offshore investors generally to remain subdued next year.
At Pace, we develop in areas that appeal to local buyers – and our current enquiry levels show the underlying demand across our projects covers a broad national geographical and demographic footprint. Whilst immigration will take time to recover, we are still very confident that the market will bounce back quicker and stronger than most experts predicted.
The picture for 2021, whilst insulated by combative tactics like government stimulus and low interest rates, offers buyers assurance that property prices are likely to hold while our economy recovers.